Question: how far can you take a joke?
- Can you actually launch a company based on nothing but complete speculation and random projections?
- Can you do an IPO based on nothing but a $50 machine that is competing against pretty much every other tech company in the world and that nobody knows about?
- Can you obtain a multi-billion dollar valuation on this company based on roughly $400M in sales? After fifteen years?
- Can you actually double your IPO price in two days? Based on a company that has never been profitable and most likely never will be?
- Can you actually convince people you’re not another GoPro, Fitbit, whatever?
Apparently, the answer to these questions is “Yes.”
Honestly, the first time I heard Roku was doing an IPO, I thought it was a joke:
After SnapChat ($30B, okay) and Blue Apron, I thought, “There’s no way the IPO market can drop any lower.”
Are people really that stupid? Is there really someone who woke up and said to himself, “I am going to invest into Roku. It’s a solid place to invest my money.”
For fuck’s sake people, this company sells a $50 TV stick. That isn’t even that highly reviewed. It shouldn’t even exist as a private company. The “Smart TV” market in general is a joke, but even assuming it wasn’t, there are 20 devices you could get that are better than it. Chromecast, Apple TV, even the FireTV for all I care.
This company is not only going against Apple, Amazon, Google, it’s going against Samsung, LG, HP and plenty of others. Is there really anyone who thinks this garbage company can last more than 2 years? If so, those are probably the same people who invested in GoPro and FitBit, two other stupid fads that crashed faster than I can say “short the hell out of these companies.”
Down 80% in a year and a half – nice!
So anyway, we have this garbage stock called “Roku” now valued $2.5B which is about 10 times what it’s really worth assuming it was profitable. But this one is going to be different from GoPro and Fitbit, right? This one is going straight up to $10B and more, right?
Look, at this point, I’m starting to feel depressed: I really didn’t think anything could outdo the stupidity of Blue Apron, pretty much the stupidest IPO of all times (And, unsurprisingly, down 45% since IPO. I am SHOCKED!). What’s next, a Huffington Post IPO?
Now, one last question: “should you short ROKU?”
Do I even need to answer this one?
Wait for the hype to die down and short the shit out of it.
Roku might be okay as a hobby or part-time project ala Rasberry Pi, but not a penny more.
VERDICT: Probably the dumbest IPO I’ve seen in my life so far. I’d dare the market to complete an even worse IPO but I’m afraid of what I could get.
Roku may survive until christmas on stupid hype that “omg omg omg gonna triple its sales all of a sudden” but not a second longer.
Single digit within a year.